GCube held its 18th Advisory Council in Newport Beach, California, on the 3rd and 4th of November. The event saw a series of talks, discussion panels and group sessions led by specialists across the insurance, risk management and renewable energy sector. This year, the Advisory Council discussed the significant and long- overdue market reset that is occurring in the North American insurance market, what lessons can be learned from the past few years to tackle future risks in emerging markets such as offshore wind, and how long hard market conditions may last.
A global ‘centre of excellence’ for renewables insurance
The event was opened by GCube’s Chief Executive, Fraser McLachlan, who welcomed the attendees before providing a brief, high-level overview of GCube’s activity over the past six months and expanding on the news of the company’s recent acquisition by Tokio Marine HCC (TMHCC). TMHCC has been underwriting energy related business for more than 20 years and has been a capacity provider for GCube throughout much of this period. The two teams already have a strong, long- standing working relationship.
Fraser introduced the first speaker, Susan Rivera, CEO, Tokio Marine HCC, who continued to delve into TMHCC’s acquisition of GCube, explaining the strategic rationale for the purchase and how it supports the Tokio Marine Group’s commitment to addressing climate change. Susan outlined the benefits and value the acquisition is already creating for GCube and TMHCC as the teams build a global ‘center of excellence’ for renewables insurance.
“Smart Insurance” and building a global renewable energy portfolio
Susan was followed by Gareth Brown, CEO, Clir Renewables & Fraser who took to the stage again to introduce an exciting new joint offering, “Smart Insurance”. As the renewables market matures, digitalizes and develops an increasingly advanced understanding of what goes wrong, when and where, it’s time for the insurance industry to take a more progressive approach to setting terms and conditions. Smart Insurance will bring significant benefits to those that want to invest in a more data- driven approach to underwriting.
Gareth was followed by Lori Seidenberg, Global Director of Real Assets Insurance Risk Management, BlackRock, who charted the firm’s recent expansion and pinpointed some of the key development risks the team is building and managing across its global portfolio. BlackRock is one of the world’s largest investors in renewable energy, with substantial development pipelines throughout the USA, Latin America, Europe and Asia.
Catastrophic weather and risk
The Council then participated in a Q&A and panel discussion exploring the prevalence of large, complex claims in the US market and the lessons learned from handling major losses in recent months. The panel was moderated by James Papazis, North American Claims and Legal Counsel, GCube Insurance, and made up of experts from claims, loss adjusting, construction and forensic accounting, including Scott Archer, Senior Executive General Adjuster, Sedgwick, Granger Stuck, Executive Managing Director – Builder’s Risk Practice Lead, and Alex Degan, Director, J.S. Held LLC.
Melissa Brill, Co-Chair, Global Insurance, and Paul Ferland, Member, Cozen O’Connor, then discussed how the recent frequency of catastrophic events – hurricanes, tornadoes, wildfires and earthquakes – have impacted renewable energy construction projects. Melissa and Paul analyzed common issues, took a critical look at additional insured provisions, and discussed how courts have assessed who has an insurable interest in a Builder’s Risk project.
Uncharted Waters for offshore wind
Following this, João Metelo, Senior Advisor, Global Infrastructure Partners, assessed which technologies will have the competitive advantage on the East and West Coasts, and how investors can manage the risk profile of building out new capacity in uncharted waters. Big offshore wind plans have recently been announced by the Biden Administration, with auctions scheduled from Maine to California.
On the Advisory Council’s final day, Michael Galea, Underwriter, GCube Insurance, explored the major loss trends that have affected offshore wind projects in Europe over the past 10 years, and how the US can tackle its own challenges whilst avoiding some of the pitfalls encountered in global offshore wind insurance to date. Michael also presented some of the key findings from GCube’s offshore wind claims report.
Where next for the renewable energy insurance market?
Concluding proceedings, Susan and Fraser returned to lead a panel discussion on where the insurance market is headed next. North American renewables insurance is undergoing a significant and long-overdue market reset. Whilst soft market conditions have driven a slow ‘race to the bottom’ over several years, market hardening is normally a swift affair. Susan and Fraser discussed how now, more than ever, the market needs to collaborate on fair terms and pricing that ensure the ongoing availability of sustainable renewable energy insurance,
The Advisory Council brings together senior representatives from the North American insurance and risk management communities for a behind closed doors discussion of key renewable energy market issues.
In 2022, GCube plans to hold a Renewable Energy Risk Seminar for its European clients in H1, before bringing the Advisory Council back together in the latter half of the year.
For more information on the Advisory Council and GCube’s wider events schedule, please contact [email protected] or visit our events page.